§6901. Definitions

In this chapter—

(1) “entitlement land” means land owned by the United States Government—

(A) that is in the National Park System or the National Forest System, including wilderness areas and lands described in section 2 of the Act of June 22, 1948 (16 U.S.C. 577d), and section 1 of the Act of June 22, 1956 (16 U.S.C. 577d–1);

(B) the Secretary of the Interior administers through the Bureau of Land Management;

(C) dedicated to the use of the Government for water resource development projects;

(D) on which are located semi-active or inactive installations (except industrial installations) that the Secretary of the Army keeps for mobilization and for reserve component training;

(E) that is a dredge disposal area under the jurisdiction of the Secretary of the Army;

(F) that is located in the vicinity of Purgatory River Canyon and Pinon Canyon, Colorado, and acquired after December 23, 1981, by the United States Government to expand the Fort Carson military installation;

(G) that is a reserve area (as defined in section 401(g)(3) of the Act of June 15, 1935 (16 U.S.C. 715s(g)(3))); or

(H) acquired by the Secretary of the Interior or the Secretary of Agriculture under section 5 of the Southern Nevada Public Land Management Act of 1998 that is not otherwise described in subparagraphs (A) through (G).

(2)(A) “unit of general local government” means—

(i) a county (or parish), township, borough, or city (other than in Alaska) where the city is independent of any other unit of general local government, that—

(I) is within the class or classes of such political subdivision in a State that the Secretary of the Interior, in his discretion, determines to be the principal provider or providers of governmental services within the State; and

(II) is a unit of general government, as determined by the Secretary of the Interior on the basis of the same principles as were used by the Secretary of Commerce on January 1, 1983, for general statistical purposes;

(ii) any area in Alaska that is within the boundaries of a census area used by the Secretary of Commerce in the decennial census, but that is not included within the boundary of a governmental entity described under clause (i);

(iii) the District of Columbia;

(iv) the Commonwealth of Puerto Rico;

(v) Guam; and

(vi) the Virgin Islands.

(B) the term “governmental services” includes, but is not limited to, those services that relate to public safety, the environment, housing, social services, transportation, and governmental administration.

In clause (1), before subclause (A), the text of 31:1606(b) is omitted as unnecessary because of the restatement of the source provisions. In subclause (A), the word “and” is substituted for “within each, or any combination thereof” to eliminate unnecessary words. The words “but not limited to” are omitted as surplus. In subclause (D), the words “effective October 1, 1978” are omitted as executed. The words “Secretary of the Army” are substituted for “Army” for consistency. In subclause (E), the words “owned by the United States” are omitted as surplus. The words “Secretary of the Army” are substituted for “Army Corps of Engineers” because of 10:3012. In subclause (F), the word “Government” is added for clarity. In subclause (G), the words “In administering sections 1601 to 1607 of title 31” are omitted as unnecessary. The words “for fiscal years occurring after September 30, 1978” are omitted as executed. Subclause (G) is substituted for 16:715s(h)(1) because of the restatement.

In clause (2), before subclause (A), the word “general” is added for consistency in the title. In subclause (A), the word “parish” is omitted as unnecessary because of 1:2. The word “city” is substituted for “municipality” for consistency in the subtitle. The words “State of” are omitted as surplus. The words “political subdivision of a State” are substituted for “unit of government below the State” for consistency. The words “the basis of” are omitted as surplus. The word “basis” is substituted for “principle” for consistency in the subtitle. The words “Secretary of Commerce” are substituted for “Bureau of the Census”, and the words “general purpose political subdivision of a State” are substituted for “unit of general government”, for consistency. In subclause (B), the words “Such term also includes” are omitted as unnecessary. Subclause (D) is added because of section 502 of the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America.

References in Text

Section 5 of the Southern Nevada Public Land Management Act of 1998, referred to in par. (1)(H), is section 5 of Pub. L. 105–263, Oct. 19, 1998, 112 Stat. 2347, subsec. (d) of which amended this section. Subsecs. (a) to (c) of section 5, which related to acquisition of certain environmentally sensitive land, are not classified to the Code.

“(A) a county (or parish), township, borough, or city where the city is independent of any other unit of general local government, that: (i) is within the class or classes of such political subdivisions in a State that the Secretary of the Interior, in his discretion, determines to be the principal provider or providers of governmental services within the State; and (ii) is a unit of general government as determined by the Secretary of the Interior on the basis of the same principles as were used on January 1, 1983, by the Secretary of Commerce for general statistical purposes. The term ‘governmental services’ includes, but is not limited to, those services that relate to public safety, environment, housing, social services, transportation, and governmental administration;

1988—Par. (2)(A). Pub. L. 100–446, as amended by Pub. L. 103–272, struck out “existing in Alaska on October 20, 1976” after “township, borough”.

1983—Par. (2). Pub. L. 98–63 amended par. (2) generally, substituting in subpar. (A) “a county (or parish), township, borough existing in Alaska on October 20, 1976, or city where the city is independent of any other unit of general local government, that: (i) is within the class or classes of such political subdivisions in a State that the Secretary of the Interior, in his discretion, determines to be the principal provider or providers of governmental services within the State; and (ii) is a unit of general government as determined by the Secretary of the Interior on the basis of the same principles as were used on January 1, 1983, by the Secretary of Commerce for general statistical purposes. The term ‘governmental services’ includes, but is not limited to, those services that relate to public safety, environment, housing, social services, transportation, and governmental administration” for “a county, city, township, borough existing in Alaska on October 20, 1976, or other political subdivision of a State that the Secretary of the Interior, on the same basis that the Secretary of Commerce uses for general statistical purposes, decides is a general purpose political subdivision of a State”; including the District of Columbia in definition; and excluding the Commonwealth of the Northern Mariana Islands from definition.

Effective Date of 1994 Amendment

Section 4(f)(3) of Pub. L. 103–272 provided that the amendment made by that section is effective Sept. 27, 1988.

Short Title of 1994 Amendment

Pub. L. 103–397, §1, Oct. 22, 1994, 108 Stat. 4156, provided that: “This Act [amending sections 6902 and 6903 of this title and enacting provisions set out as notes under sections 6902 and 6903 of this title] may be cited as the ‘Payments In Lieu of Taxes Act’.”

(a)(1) Except as provided in paragraph (2), the Secretary of the Interior shall make a payment for each fiscal year to each unit of general local government in which entitlement land is located as set forth in this chapter. A unit of general local government may use the payment for any governmental purpose.

(2) For each unit of general local government described in section 6901(2)(A)(ii), the Secretary of the Interior shall make a payment for each fiscal year to the State of Alaska for entitlement land located within such unit as set forth in this chapter. The State of Alaska shall distribute such payment to home rule cities and general law cities (as such cities are defined by the State) located within the boundaries of the unit of general local government for which the payment was received. Such cities may use monies received under this paragraph for any governmental purpose.

(b) A unit of general local government may not receive a payment for land for which payment under this Act 2 otherwise may be received if the land was owned or administered by a State or unit of general local government and was exempt from real estate taxes when the land was conveyed to the United States except that a unit of general local government may receive a payment for—

(1) land a State or unit of general local government acquires from a private party to donate to the United States within 8 years of acquisition;

(2) land acquired by a State through an exchange with the United States if such land was entitlement land as defined by this chapter; or

(3) land in Utah acquired by the United States for Federal land, royalties, or other assets if, at the time of such acquisition, a unit of general local government was entitled under applicable State law to receive payments in lieu of taxes from the State of Utah for such land: Provided, however, That no payment under this paragraph shall exceed the payment that would have been made under State law if such land had not been acquired.

In subsection (a), the words “Effective for fiscal years beginning on and after October 1, 1976” are omitted as executed. The words “(as defined in section 1606 of this title)” are omitted because of the restatement. The text of 31:1601(last sentence) is omitted as unnecessary.

In subsection (b), the word “or” is substituted for “and/or” for consistency. The words “except that, beginning in fiscal year 1979” are omitted as executed. The words “of such land” are omitted as surplus. The word “Federal” is omitted as unnecessary. The words “and which is or was so donated . . . thereof by the State or unit of local government” are omitted as surplus.

In subsection (c), the citation in parentheses for the Act of May 24, 1939, is included only for information purposes.

In subsection (d), the words “county or” are omitted as unnecessary because a county is a unit of general local government under section 6901 of the revised title.

Amendments

1996—Subsec. (a). Pub. L. 104–333 amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “The Secretary of the Interior shall make a payment for each fiscal year to each unit of general local government in which entitlement land is located, as set forth in this chapter. A unit of general local government may use the payment for any governmental purpose.”

“(a) The Secretary of the Interior shall make a payment for each fiscal year to each unit of general local government in which entitlement land is located. A unit may use the payment for any governmental purpose.

“(b) A unit of general local government may not receive a payment for land for which payment under this chapter otherwise may be received if the land was owned or administered by a State or unit and was exempt from real estate taxes when the land was conveyed to the United States Government. This subsection does not apply to payments for land a State or unit acquires from a private party to donate to the Government within 8 years of acquisition, nor does this subsection apply to payments for lands in Utah acquired by the United States if at the time of such acquisition units, under applicable State law, were entitled to receive payments from the State for such lands, but in such case no payment under this chapter with respect to such acquired lands shall exceed the payment that would have been made under State law if such lands had not been acquired.

“(c) A unit of general local government receiving payment for a fiscal year for land under the Act of August 28, 1937 (43 U.S.C. 1181a et seq.), or the Act of May 24, 1939 (ch. 144, 53 Stat. 753), may not receive a payment under this chapter for the land for that fiscal year. This chapter does not apply to either Act.

“(d) If the total payment to a unit of general local government for a fiscal year would be less than $100, the Secretary may not make the payment.”

1993—Subsec. (b). Pub. L. 103–93 substituted “acquisition, nor does this subsection apply to payments for lands in Utah acquired by the United States if at the time of such acquisition units, under applicable State law, were entitled to receive payments from the State for such lands, but in such case no payment under this chapter with respect to such acquired lands shall exceed the payment that would have been made under State law if such lands had not been acquired” for “acquisition”.

Effective Date of 1994 Amendment

Section 5(a) of Pub. L. 103–397 provided that:

“(1) In general.—Except as provided in paragraph (2), this Act [amending this section and section 6903 of this title and enacting provisions set out as notes under sections 6901 and 6903 of this title] and the amendments made by this Act shall become effective on October 1, 1994.

“(2) Limitation.—The amendment made by section 2(b)(2) [amending section 6903 of this title] shall become effective on October 1, 1998.”

(J) section 10 of the Act of June 28, 1934 (known as the Taylor Grazing Act) (43 U.S.C. 315i).

(2) population shall be determined on the same basis that the Secretary of Commerce determines resident population for general statistical purposes.

(3) a unit of general local government may not be credited with a population of more than 50,000.

(b)(1) A payment under section 6902 of this title is equal to the greater of—

(A) 93 cents during fiscal year 1995, $1.11 during fiscal year 1996, $1.29 during fiscal year 1997, $1.47 during fiscal year 1998, and $1.65 during fiscal year 1999 and thereafter, for each acre of entitlement land located within a unit of general local government (but not more than the limitation determined under subsection (c) of this section) reduced (but not below 0) by amounts the unit received in the prior fiscal year under a payment law; or

(B) 12 cents during fiscal year 1995, 15 cents during fiscal year 1996, 17 cents during fiscal year 1997, 20 cents during fiscal year 1998, and 22 cents during fiscal year 1999 and thereafter, for each acre of entitlement land located in the unit (but not more than the limitation determined under subsection (c) of this section).

(2) The chief executive officer of a State shall submit to the Secretary of the Interior a statement on the amounts of payments the State transfers to each unit of general local government in the State out of amounts received under a payment law.

(c)(1) The limitation for a unit of general local government with a population of not more than 4,999 is the highest dollar amount specified in paragraph (2).

(2) The limitation for a unit of general local government with a population of at least 5,000 is the following amount (rounding the population off to the nearest thousand):

the limitation

is equal to the

population

If population equals—

times—

5,000

$110.00

6,000

103.00

7,000

97.00

8,000

90.00

9,000

84.00

10,000

77.00

11,000

75.00

12,000

73.00

13,000

70.00

14,000

68.00

15,000

66.00

16,000

65.00

17,000

64.00

18,000

63.00

19,000

62.00

20,000

61.00

21,000

60.00

22,000

59.00

23,000

59.00

24,000

58.00

25,000

57.00

26,000

56.00

27,000

56.00

28,000

56.00

29,000

55.00

30,000

55.00

31,000

54.00

32,000

54.00

33,000

53.00

34,000

53.00

35,000

52.00

36,000

52.00

37,000

51.00

38,000

51.00

39,000

50.00

40,000

50.00

41,000

49.00

42,000

48.00

43,000

48.00

44,000

47.00

45,000

47.00

46,000

46.00

47,000

46.00

48,000

45.00

49,000

45.00

50,000

44.00.

(d) On October 1 of each year after the date of enactment of the Payment in Lieu of Taxes Act, the Secretary of the Interior shall adjust each dollar amount specified in subsections (b) and (c) to reflect changes in the Consumer Price Index published by the Bureau of Labor Statistics of the Department of Labor, for the 12 months ending the preceding June 30.

In subsection (a)(1), before subclause (A), the word “payment” is added for clarity. Subclause (E) is substituted for 16:715s(h)(2) because of the restatement. In clause (2), the words “Secretary of Commerce” are substituted for “Bureau of the Census” for consistency. In clause (4), the words “the jurisdiction of” are omitted as surplus. The word “deemed” is substituted for “treated” for consistency.

In subsections (b) and (c), the word “population” before “limitation” is omitted as unnecessary.

In subsection (b)(1), before clause (A), the words “The amount of . . . made for any fiscal year to a unit of local government . . . the following amounts” are omitted as surplus. In clauses (A) and (B), the words “the boundaries of” are omitted as surplus. In clause (A), the words “aggregate . . . of payments, if any” are omitted as surplus. The words “a payment law” are substituted for “all of the provisions specified in section 1604 of this title” because of the restatement.

In subsection (b)(2), the words “chief executive officer” are substituted for “Governor (or his delegate)” for consistency in the revised title and with other titles of the United States Code. The words “a payment law” are substituted for “a provision specified in section 1604 of this title” because of the restatement of 31:1604 in subsection (a).

In subsection (c)(1), the words “amount equal to” and “within the jurisdiction of such unit of local government” are omitted as surplus.

In subsection (c)(2), the words “computed under the . . . table” are omitted as unnecessary. The words “the limitation is equal to the population times” are substituted for “Payment shall not exceed the amount computed by multiplying such population by” for clarity and consistency.

References in Text

Act of June 20, 1910 (ch. 310, 36 Stat. 557), referred to in subsec. (a)(1)(A), is not classified to the Code.

The Secure Rural Schools and Community Self-Determination Act of 2000, referred to in subsec. (a)(1)(C), is Pub. L. 106–393, Oct. 30, 2000, 114 Stat. 1607, which is classified principally to chapter 90 (§7101 et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see Short Title note set out under section 7101 of Title 16 and Tables.

The date of enactment of the Payment in Lieu of Taxes Act, referred to in subsec. (d), probably means the date of enactment of the Payments In Lieu of Taxes Act, Pub. L. 103–397, which was approved Oct. 22, 1994.

Amendments

1994—Subsec. (b)(1)(A). Pub. L. 103–397, §2(a)(1), substituted “93 cents during fiscal year 1995, $1.11 during fiscal year 1996, $1.29 during fiscal year 1997, $1.47 during fiscal year 1998, and $1.65 during fiscal year 1999 and thereafter, for each acre of entitlement land” for “75 cents for each acre of entitlement land”.

Subsec. (b)(1)(B). Pub. L. 103–397, §2(a)(2), substituted “12 cents during fiscal year 1995, 15 cents during fiscal year 1996, 17 cents during fiscal year 1997, 20 cents during fiscal year 1998, and 22 cents during fiscal year 1999 and thereafter, for each acre of entitlement land” for “10 cents for each acre of entitlement land”.

Subsec. (c)(2). Pub. L. 103–397, §2(b)(2), amended table generally by augmenting dollar amounts by which population totals must be multiplied in order to equal the limitation from $39.25 to $98.00 under prior table to $44.00 to $110.00.

Pub. L. 103–397, §5(b)(4), amended table generally for fiscal year 1998 by augmenting dollar amounts by which population totals must be multiplied in order to equal the limitation from $34.50 to $86.00 under prior table to $39.25 to $98.00.

Pub. L. 103–397, §5(b)(3), amended table generally for fiscal year 1997 by augmenting dollar amounts by which population totals must be multiplied in order to equal the limitation from $29.50 to $74.00 under prior table to $34.50 to $86.00.

Pub. L. 103–397, §5(b)(2), amended table generally for fiscal year 1996 by augmenting dollar amounts by which population totals must be multiplied in order to equal the limitation from $24.75 to $62.00 under prior table to $29.50 to $74.00.

Pub. L. 103–397, §5(b)(1), amended table generally for fiscal year 1995 by augmenting dollar amounts by which population totals must be multiplied in order to equal the limitation from $20.00 to $50.00 under prior table to $24.75 to $62.00.

Subsec. (d). Pub. L. 103–397, §3, added subsec. (d).

1983—Subsec. (a)(4). Pub. L. 98–63 struck out par. (4) which provided that if any part of a small unit was located within another unit, entitlement land within both units was deemed to be located within the smaller unit.

Effective Date of 1994 Amendment

Amendment by sections 2(a), (b)(1), and 3 of Pub. L. 103–397 effective Oct. 1, 1994, and amendment by section 2(b)(2) of Pub. L. 103–397 effective Oct. 1, 1998, see section 5(a) of Pub. L. 103–397, set out as a note under section 6902 of this title.

Section 5(b)(1) of Pub. L. 103–397 provided for the amendment of the table at the end of subsec. (c)(2) of this section during fiscal year 1995.

Section 5(b)(2) of Pub. L. 103–397 provided for the amendment of the table at the end of subsec. (c)(2) of this section during fiscal year 1996.

Section 5(b)(3) of Pub. L. 103–397 provided for the amendment of the table at the end of subsec. (c)(2) of this section during fiscal year 1997.

Section 5(b)(4) of Pub. L. 103–397 provided for the amendment of the table at the end of subsec. (c)(2) of this section during fiscal year 1998.

Payments Made Prior to January 1, 1983

Section 101(3) of Pub. L. 98–63 provided in part that: “The United States shall not be subject to any cause of action or any liability for distribution of payments made prior to January 1, 1983, under the Act of October 20, 1976 (90 Stat. 2662), as amended [Pub. L. 94–565, see 31 U.S.C. 6901 et seq.], or regulations pursuant thereto.”

§6904. Additional payments

(a) In addition to payments the Secretary of the Interior makes under section 6902 of this title, the Secretary shall make a payment for each fiscal year to a unit of general local government collecting and distributing real property taxes (including a unit in Alaska outside the boundaries of an organized borough) in which is located an interest in land that—

(1) the United States Government acquires for—

(A) the National Park System; or

(B) the National Forest Wilderness Areas; and

(2) was subject to local real property taxes within the 5-year period before the interest is acquired.

(b) The Secretary shall make payments only for the 5 fiscal years after the fiscal year in which the interest in land is acquired. Under guidelines the Secretary prescribes, the unit of general local government receiving the payment from the Secretary shall distribute payments proportionally to units and school districts that lost real property taxes because of the acquisition of the interest. A unit receiving a distribution may use a payment for any governmental purpose.

(c) Each yearly payment by the Secretary under this section is equal to one percent of the fair market value of the interest in land on the date the Government acquires the interest. However, a payment may not be more than the amount of real property taxes levied on the property during the last fiscal year before the fiscal year in which the interest is acquired. A decision on fair market value under this section may not include an increase in the value of an interest because the land is rezoned when the rezoning causes the increase after the date of enactment of a law authorizing the acquisition of an interest under subsection (a) of this section.

(d) The Secretary may prescribe regulations under which payments may be made to units of general local government when subsections (a) and (b) of this section will not carry out the purpose of subsections (a) and (b).

In the section, the words “land or” are omitted as being included in “interest in land”.

In subsection (a), before clause (1), the words “the Secretary of the Interior makes” are added for clarity. The words “unit of general local government collecting and distributing real property taxes (including a unit in Alaska outside the boundaries of an organized borough)” are substituted for “county” and 31:1603(a)(3d sentence) and (e) to eliminate unnecessary words. The words “the jurisdiction of” are omitted as surplus. In subclause (A), the words “for the Redwood National Park pursuant to subchapter VII of chapter 1 of title 16” are omitted as executed because the Redwood National Park is now part of the National Park System.

In subsection (b), the words “The Secretary shall make payments only for the 5 fiscal years after the fiscal year in which the interest in land is acquired” are substituted for 31:1603(b)(1st sentence) and (d) to eliminate unnecessary words. The words “affected” and “for addition to either such systems” are omitted as surplus. The words “receiving a distribution” are added for clarity.

In subsection (c), the words “The amount of . . . made . . . fiscal . . . to any unit of local government and affected school districts” are omitted as surplus. The words “by the Secretary” are added for clarity. The words “made for any fiscal year to a unit of local government under subsection (a) of this section”, “assessed and”, “full”, and “for addition to the National Park System or National Forest Wilderness Areas” are omitted as surplus.

§6905. Redwood National Park and the Lake Tahoe Basin

(a) The Secretary of the Interior shall make a payment for each fiscal year to each unit of general local government in which an interest in land owned by the United States Government in the Redwood National Park is located. A unit may use the payment for any governmental purpose. The payment shall be made as provided in section 6903 of this title and shall include an amount payable under section 6903.

(b)(1) In addition to payments the Secretary makes under subsection (a) of this section, the Secretary shall make a payment for each fiscal year to each unit of general local government in which is located an interest in land—

(A) owned by the Government in the Redwood National Park; or

(B) acquired in the Lake Tahoe Basin under the Act of December 23, 1980 (Public Law 96–586, 94 Stat. 3383).

(2) The payment shall be made as provided in section 6904 of this title and shall include an amount payable under section 6904. However, an amount computed but not paid because of the first sentence of subsection (b) and the 2d sentence of subsection (c) of section 6904 shall be carried forward and applied to future years in which the payment would not otherwise equal the amount of real property taxes assessed and levied on the land during the last fiscal year before the fiscal year in which the interest was acquired until the amount is applied completely.

(3) The unit of general local government may use the payment for any governmental purpose.

(4) The Redwoods Community College District is a school district under section 6904(b) of this title.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 1034.)

Historical and Revision Notes

Revised Section

Source (U.S. Code)

Source (Statutes at Large)

6905(a)

16:79o(a), (b).

Mar. 27, 1978, Pub. L. 95–250, §106, 92 Stat. 171.

6905(b)(1)– (3)

(uncodified).

Dec. 23, 1980, Pub. L. 96–586, §2(i), 94 Stat. 3383.

16:79o(c).

6905(b)(4)

16:79o(d).

In subsection (a), the words “Notwithstanding any contrary provision of sections 1601 to 1607 of title 31” are omitted as unnecessary because of the restatement. The word “general” is added for consistency in the revised title and with other titles of the United States Code. The words “an interest in” are added for consistency because of the source provisions restated in the revised section. The word “Government” is added for consistency in the revised title and with other titles of the Code. The text of 16:79o(a)(last sentence) is omitted as unnecessary.

In subsection (b)(1)–(3), the source provisions are combined for clarity and because of the restatement.

In subsection (b)(2), the words “portion of the total”, “full”, and “land or” are omitted as surplus. The words “for addition to Redwood National Park” are omitted as unnecessary because of the restatement.

In subsection (b)(4), the word “affected” is omitted as surplus.

References in Text

The provisions of Act of December 23, 1980 (Public Law 96–586, 94 Stat. 3383) which relate to the acquisition of the Lake Tahoe Basin, referred to in subsec. (b)(1)(B), are not classified to the Code.

§6906. Funding

For each of fiscal years 2008 through 2012—

(1) each county or other eligible unit of local government shall be entitled to payment under this chapter; and

(2) sums shall be made available to the Secretary of the Interior for obligation or expenditure in accordance with this chapter.

The words “to the Secretary of the Interior” are added for clarity. The words “Provided, That, notwithstanding any other provision of this chapter” and “in advance” are omitted as unnecessary.

Amendments

2008—Pub. L. 110–343 amended section generally. Prior to amendment, section read as follows: “Necessary amounts may be appropriated to the Secretary of the Interior to carry out this chapter. Amounts are available only as provided in appropriation laws.”

§6907. State legislation requiring reallocation or redistribution of payments to smaller units of general purpose government

(a) Notwithstanding any other provision of this chapter, a State may enact legislation which requires that any payments which would be made to units of general local government pursuant to this chapter be reallocated and redistributed in whole or part to other smaller units of general purpose government which (1) are located within the boundaries of the larger unit of general local government, (2) provide general governmental services and (3) contain entitlement lands within their boundaries. Such reallocation or redistribution shall generally reflect the level of services provided by, and the number of entitlement acres within, the smaller unit of general local government.

(b) Upon enactment of legislation by a State, described in subsection (a), the Secretary shall make one payment to such State equaling the aggregate amount of payments which he otherwise would have made to units of general local government within such State pursuant to this chapter. It shall be the responsibility of such State to make any further distribution of the payment pursuant to subsection (a). Such redistribution shall be made within 30 days after receipt of such payment. No payment, or portion thereof, made by the Secretary shall be used by any State for the administration of this subsection or subsection (a).

(c) Appropriations made for payments in lieu of taxes for a fiscal year may be used to correct underpayments in the previous fiscal year to achieve equity among all qualified recipients.